Just in case you haven’t been paying attention, the used car business has a big problem, and that problem is price. Yes, price has always been the wedge between competitiveness and profit, but the onset of internet used vehicle listing services is making that wedge so large as to splinter the used car business into pieces.
For decades customers have gone from lot to lot, comparing prices and vehicles. Salesperson after salesperson. Price was a factor then, but at least you had the opportunity to talk to a prospect. A customer may compare prices, look for a better deal; it was pretty simple. If you could sell, or had a team of halfway decent sales staff, you could sell some cars.
If a customer visited the lot, they could see and hear what kind of dealership you were. Part of a large new car franchise. Maybe a large used car operator. A large established business they could have confidence in. They could hear how you reconditioned your vehicles, how you stood behind them, to gain confidence in you, maybe learn why they should pay you a little more than the guy with a gas station next to a cornfield. Not that there's anything wrong with that.
Large used vehicle web-based listing services have made a shopping experience that used to take days, take only minutes.
The internet has basically destroyed that, with the help of a few large used vehicle web-based listing services. They have made that shopping experience that used to take days or weeks, take only minutes. A click of the mouse or a swipe on their smart phone automatically sorts their choices, by price. Yes, these listing services try to deny it, they sell you higher ranking listings, and placements but let’s face it, the prospect is driven by the price. And that’s a problem.
The problem is not that the consumer can find the lowest price easily, that is their right, the problem is that the dealer has lost the opportunity to show the prospect why they should pay more to do business with them. Anyone can have a big shiny store on the internet. Having one in real life costs money. Anyone can say they will stand behind what they sell but being part of a community and actually doing it costs money too.
If you have a quality business that sells a quality product, the solution is to invest your marketing dollars into branding.
But there is a solution. The solution is to invest your marketing dollars elsewhere. Especially in brand. If you have a nice, local, quality business that sells a quality product, or perhaps operates in a niche of some kind, that is what you should be spending money marketing. Not thousands and thousands of dollars every month to help someone else sell cars because they can offer a lower price or help some new or old listing service build their database with your inventory.
Eventually customers will gravitate to dealers that have quality products and services; the internet will definitely do that. If you’re that dealer, you will eventually win the day. If you’re that price aggressive dealer, then all good, those price listing services are where you need to be, but if you’re not, then maybe take another look at where you are spending your money and stop helping other dealers that you cannot compete with, sell cars. Focus on your strengths as a business. If price isn’t one of them, then a listing service that puts you up against everyone and their brother isn’t doing you any favours. Good luck and good selling.